Tag: IPO

The news of Facebook going public was thought to bring along heavy cash and plenty of fortune for the company and its founder, Mark Zuckerberg. It turns out that Zuckerberg has undergone an experience that has shaped into something altogether different. With over 900 million users, the company founded by Zuckerberg in 2004 got registered on the Nasdaq Stock Exchange on May 18, 2012. The initial value of its share was traded at $38. As days passed, the value of Facebook shares started to take a downturn. For example, last Wednesday, May 30, 2012, Facebook’s share was being traded at $28.

The plummeting of the company’s share saw a negative impact on Zuckerberg’s fortune. On May 18, 2012, Zuckerberg accumulated approximately $19 billion just before Facebook knocked on Nasdaq’s doors. In contrast, 12 days later, on May 30, 2012, Zuckerberg’s fortune plummeted to approximately $12 billion. This consolidates the fact that Zuckerberg does not remain amongst the list of the top 40 richest people on the planet, reports Bloomberg.

Trade analysts assume that the share value of Facebook is likely to descend further as investors are starting to get worried about how much money Facebook can generate in spite of its tremendous user base and its switch to the mobile platform, an area where it has not performed well in terms of revenue generation as it would have liked.

Facebook is reportedly targeting an IPO date of May 17. Facebook’s IPO has been highly awaited for more than a year, and is going to be the biggest internet IPO in history. If the Securities and Exchange Commission finds no issues with its IPO related filings, May 17 could be the D-day for Facebook.

Its expected valuation is around $100 billion, which makes it half as valuable as Google, its arch nemesis. Facebook makes most of its money from online advertising on its network, and the remainder from transactions of virtual goods, on which it charges a 30% cut. It will list on the NASDAQ with the ticker “FB”.

With its net profit for 2011 being $1 billion, it will have a trailing P/E of 100 at the $100 billion valuation. It is expected to reach more than a billion users by the end of 2012 or early 2013, up from 845 million at the end of 2011.

According to a Dealbook report about the Instagram acquisition, Facebook internally values the company at around $104 billion, and it’s quite likely that it may see an opening day pop, with its valuation ending up even higher.

Reports coming in state that the social netwoking giant Facebook, which is going to offer its shares publicly this year, has reportedly chosen NASDAQ over the New York Stock Exchange (NYSE) for its listing. It is said that the company will trade under the ticker symbol “FB.”

The reports also said that getting a company like Facebook on the list is a “significant coup” for NASDAQ, which has been “embroiled in a battle with the New York Stock Exchange for the darlings of Silicon Valley”. Shares of the NASDAQ OMX Group rose by 1 percent on Thursday to close at $25.52. Shares of NYSE Euronext fell about the same to close at $28.31.

NASDAQ houses large tech companies like Apple, Google, HP, and now Facebook. Facebook filed for its IPO on February 1st with the SEC, the same time when the social networking giant celebrated its 8th anniversary. Facebook is currently expected to go public in May, in what will be one of the biggest Internet IPOs of all time. It aims to raise close to $5 billion, in order to provide an exit to its existing shareholders, and get more cash to fuel its expansion spree.

The company is facing an increasing number of profile cases of user privacy infringement. Apart from that, due to the on-going recessions, the company fears that it would be undervalued which is the main reason why the company has delayed its offerings. However, the social networking giant is trying to increase the business side of the site. Last year, the total revenue was around $3.7 billion while the net income was nearly $1 billion.

It is expected to be the largest NASDAQ IPO since Google’s offering in 2004. Google raised $1.7 billion from its offering, and if Facebook’s valuations are correct, it would then become the largest NASDAQ offering putting the company at an estimated worth of $100 billion and also making it one of the most valuable company in the world alongside Apple and Google.

Facebook’s valuation has risen exponentially, with investors at almost every point set to see a positive return when it goes public at a possible valuation of $102.8 billion. Facebook is currently expected to go public in May, in what will be one of the biggest Internet IPOs of all time. It aims to raise close to $5 billion, in order to provide an exit to its existing shareholders, and get more cash to fuel its expansion spree.

Facebook has been the most active stock in secondary markets like SharesPost and SecondMarket. March 30 was the last day of secondary trading for the stock, as the SEC and Facebook halt secondary trading to clean up their books before the IPO. At the penultimate auction, its valuation was $94.4 billion, but at its final secondary auction yesterday, its valuation jumped to $102.8 billion, possibly its highest ever, according to a report by Bloomberg.

Despite being valued relatively highly, Facebook could end up seeing a significant pop in its share price on IPO day, going by the voracious investor appetite evidenced by the huge demand in secondary markets. It seems like the patent lawsuits by Yahoo and others against Facebook right before its IPO haven’t dampened investor sentiment at all.

Facebook which filed its S-1 statement with the SEC on February 1, is planning to go public in May, according to a report by the WSJ.

Facebook’s IPO is expected to be the biggest internet IPOs of all time. It is aiming to raise $10 billion at a valuation of around $100 billion. It generated $3.7 billion in revenue in 2011, with a net profit of around $1 billion. Its earnings are expected to continue to grow rapidly in the coming years, as it monetizes its massive user base of more than 845 million users more effectively.

Facebook also halted trading of its shares on the secondary market earlier this week, which sparked off speculation that the IPO may be very near.

Facebook’s IPO is expected to create more than a 1000 new millionaires, with most of its early employees and executives hitting pay dirt. We could see the emergence of the Facebook Mafia, which would spark off the next wave of startups and boost angel investing in the valley.

We should also see more patent litigation activity against Facebook, right before its IPO, from the likes of Yahoo and others looking to make a quick buck.

After weeks of frenzied speculation, Facebook has finally filed its first S-1 filing, officially announcing its intentions to go public.

Here are some of the most interesting facts and figures from Facebook’s IPO filing:

Usage:

1. Facebook has 845 million monthly active users (users who have logged in atleast once a month as of December 31, 2011). Surprisingly, its daily active user count is 483 million, which means that more than half of its total user base logs in at least once every day. It’s official now — Facebook is incredibly addictive.

2. Facebook had more than 425 million users who logged in from mobile phones in December 2011. Now you know why Facebook wants to launch its own smartphone.

3. Facebook users generated 2.7 billion likes and comments every day in December 2011. Around 250 million photos are uploaded every day on Facebook, making it the largest photo sharing site in the world. Additionally, there are more than 100 billion friendships on Facebook, an average of more than 100 per user.

Financials:

1. Facebook generated around $3.7 billion in revenue in 2011, up 88% from almost $2 billion in 2010.

2. It has an impressively high operating margin of around 47%. It made a net profit of exactly $1 billion in 2011. Surprisingly, it paid almost 41% in taxes, a much higher rate than most other technology companies which have lowered their effective tax rates by routing their money through offshore tax havens. Expect a bump in net profit in the coming years, as Facebook learns these tricks too.

3. It has nearly $4 billion in cash, cash equivalents, and marketable securities. This figure will be bumped up by around $5 billion following the IPO, which will give Facebook even more cash to expand operations and go on an acquisition spree.

Other Interesting Facts:

1. Mark Zuckerberg will retain 57% of the total voting power through various classes of Facebook stock post-IPO. That’s quite high even by recent Silicon Valley standards.

2. We know that Zynga depends on Facebook for most of its revenues, but the relationship is not completely one-sided. Facebook generated around 12% of its total revenue from Zynga in 2011.

Assuming a $100 billion valuation, this is how much the major founders and investors’ stake will be worth after the IPO.

According to reports, Morgan Stanley and Goldman Sachs were the top two investment banks fighting for the coveted “left lead” position on the IPO prospectus, and the former seems to have won the battle.

Morgan Stanley also led the much hyped Groupon and Zynga public offerings in 2011, which might have tipped the scales in its favor.

On the other hand, Goldman Sachs had managed a private deal in Facebook stock almost a year ago, which didn’t go as planned.

The average underwriting fee is approximately 5% to 7% in big tech IPOs, but the fee may be much lower in Facebook’s case.

Interestingly, it seems that Facebook is planning to raise only about $5 billion, instead of $10 billion which was reported earlier.

Assuming a $100 billion valuation, this means a free float of only around 5%, which has been the case in all recent tech IPOs, presumably to keep the stock price inflated.

Here’s yet another update on the Facebook IPO. Rumors of the much awaited IPO have been floating since months now, with no official announcement from Facebook. We previously posted that Facebook may finally go public in May. More recently, Facebook trading on Second Market and SharesPost was suspended for some days, presumably because it is going to file an S-1 statement for the IPO soon.

According to a new report by WSJ, Facebook could file papers for a public offering by February 1. It is aiming to raise $10 billion at a valuation of $75 billion to $100 billion. The deal will be led by either Morgan Stanley or Goldman Sachs, both of which are the front runners. Both the investment banks are said to have reduced their fees to as low as 1% (about $100 million in total) to win the deal, instead of their usual 3% to 5% in an IPO of this scale.

Apparently, both NASDAQ and the NYSE are clamouring for Facebook’s attention, and trying to get it listed on their exchanges.

Facebook will likely go through a standard bookbuilding process for price discovery, instead of the Dutch auction process which was used by Google in its IPO.

Given the enthusiasm and excitement surrounding Facebook’s IPO, it may easily be able to achieve a $100 billion valuation, and even higher after it goes public.

Recent IPOs like Zynga’s and Groupon’s haven’t done very well though. Both companies are currently trading below their IPO price. LinkedIn, on the other hand, is trading much above its IPO price.

Facebook now has more than 800 million users, and is estimated to have made nearly $4 billion in revenue in 2011.

Another really incredible thing about the Facebook IPO is that it will spawn more than a 1000 new millionaires. This tremendous amount of wealth creation could create a group of techies which could go on to become even more powerful than the famed Paypal Mafia.

Facebook is the largest social network in the world, with close to 800 million users. It is expected to hit 1 billion users before the end of 2012. Rumors of a Facebook IPO have been circulating since a couple of years now. We know that it will be probably going public around mid-2012, forced by SEC regulations to disclose its financials. According a new report by AllThingsD, Facebook will be likely going public in May.

It may have to file its S-1 documents in February, given that the SEC review generally takes 3-4 months.

The IPO market is currently in a very bad shape. Most tech companies which recently went public are struggling to float above their listing price. Groupon is around 5% below its IPO price of $20, while Zynga is more than 10% below its IPO price of $10.

Facebook reached a peak valuation of $80 billion in trading on secondary private exchanges like Second Market and Shares Post. It is expected to list at a valuation of more than $100 billion, but nothing is a given, considering the rough IPO market. Facebook had revenues of nearly $4 billion in 2011, which is expected to be increase to around $6 billion in 2012, as it starts monetizing its vast user base aggressively.

Facebook’s IPO will likely be led by Goldman Sachs and Morgan Stanley. It aims to raise approximately $10 billion. More than 1000 Facebook employees are expected to become millionaires following its IPO. Facebook may also see a talent drain as its employees cash out and leave the company.

Though Facebook’s share price may eventually appreciate, IPO investors likely won’t see as much gain as they would have in the case of Google or Amazon. Much of the value in Facebook’s stock has already been captured by early investors, leaving relatively little appreciation potential for retail investors.

Zynga finally made its stock market debut on Friday, and it was a pretty disappointing one. Zynga which was valued at $15 – $20 billion just a few months ago, and already decided to list at a valuation of just $7 billion, considering the gloomy macroeconomic outlook, before the IPO window was closed for good.

Jive which went public just a day before Zynga, had a pretty good pop, and is still trading much above its IPO price. Even Groupon, one of the most controversial companies in recent history, is trading around 15% above its offer price.

In its last round of funding, investors bought in at $14 a share, so they are bleeding pretty badly right now.

I’m not saying Zynga didn’t have an inflated valuation, but compared to Groupon or even Jive, it was a much better bet. Zynga is on track to clear more than $1.1 billion in revenue this year, and has been growing rapidly.

There has been a slump in its average user numbers in the past couple of quarters, but some of its new games like CastleVille and Words with Friends have really taken off. Besides, it has been diversifying its offerings on multiple platforms now, like Google+, iOS, Android and its own Zynga Direct, which should be up in 2012, to decrease its dependence on Facebook.

Zynga’s Q4 financials will be out in January 2012. Hopefully, they will be better than Q2 and Q3 numbers, and will boost its stock price.

All of this makes me wonder, why Zynga was so desperate to go public. It had around a billion dollars in cash on its balance sheet, and could have easily waited out the lull in the stock market, to list later when the investor sentiment was more positive. If it wanted to go public so desperately before reporting Q4 financials, you have to wonder – are the numbers that bad? Or is it just bad timing?